Special package for AP and Bihar: NDA allies TDP, JDU step up pressure ahead of Budget

Ahead of the Union Budget on July 23, senior Janata Dal (United) leader and State Minister Vijay Kumar Chaudhary sought a special package for Bihar if the Centre could not grant the state special category status. Another key NDA ally, TDP, has also made a similar demand.

Chaudhary said Bihar lacks natural resources due to historical and geographical reasons, driving home the absence of mines and a coastline. Despite these limitations, he took pride in Bihar’s progress under Nitish Kumar’s leadership, contending that the state has demonstrated massive strides in development.

NDA's second-largest ally is seeking Rs 30,000 crore from this year’s Budget to fund projects in Bihar, reports said

JD(U), TDP's consistent demand

The JD(U) and BJP's ally, the Telugu Desam Party (TDP), have consistently demanded special status for their respective states. Andhra Pradesh, facing economic and developmental challenges post-2014 bifurcation, argues that special status would attract investments and create jobs.

Andhra Pradesh Chief Minister N Chandrababu Naidu recently met Union Home Minister Amit Shah and is expected to meet Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi to discuss the state's financial needs.

During his meeting with Shah on July 16 in New Delhi, Naidu sought a sizeable fund allocation in the Budget to address the state's financial challenges.

"Unjust bifurcation"

During the meeting at Shah's residence, Naidu insisted that Andhra Pradesh continues to bleed from the "unjust bifurcation" in 2014 and the previous administration's "miserable governance.

Amid these demands, reports indicate the NDA government might consider special economic grants to nearly six states, including Bihar, Andhra Pradesh, Jharkhand, Chhattisgarh, Odisha, and the Union Territory of J&K in the forthcoming budget.

Reports said special status is not feasible under NITI Aayog norms, special economic grants might be possible to support development in these states.

What is special category status?

Special category status, introduced in 1969 on the recommendations of the Fifth Finance Commission, aims to support states facing geographical and socio-economic challenges through additional financial assistance and other benefits.

The concept, formulated by social scientist Dhananjay Ramchandra Gadgil, then deputy chairman of the Planning Commission (now Niti Aayog), was designed to address issues in states with hilly terrains, low population density, tribal populations, strategic locations, economic and infrastructural backwardness, and non-viable state finances.